Monday, 24 December 2012 09:28
SINGAPORE: The yen dipped against the greenback and euro in Asian trade Monday as incoming Japanese premier Shinzo Abe stepped up pressure on the Bank of Japan to set a two percent inflation target.
The euro bought 111.26 yen in early Christmas eve trade from 110.05 yen in US trade Friday, after Abe on Sunday threatened to revise a law guaranteeing the BoJ's independence if it did not back his proposed inflation goal.
The US dollar fetched 84.41 yen from 84.25 yen, while the single currency bought $1.3182 from $1.3181.
"The yen is finding sellers, even in thin holiday trade," said Jason Hughes, head of premium client management for IG Markets Singapore.
"The changes in political circles in Japan means we will see a more aggressive stance in weakening" the yen, he told AFP.
Abe is expected to take office on Wednesday, following a landslide victory in national elections this month.
The hawkish leader of the conservative Liberal Democratic Party has pushed for a two percent target in a bid to drag Japan out of years of deflation.
He has criticised the central bank for not doing more to stoke Japan's economy -- which may have slipped into a recession in the third quarter -- and has advocated "unlimited" easing measures, drawing a mixed response from economists.
But the market has welcomed his rhetoric, boosting the Nikkei index at the Tokyo Stock Exchange in recent weeks.
Copyright AFP (Agence France-Presse), 2012